Sharing the future

India and Nepal must build on the socio-cultural foundations of their relationship to meet the economic and ecological challenges of the 21st century

Written by Swarnim Waglé |
Updated: August 24, 2017 8:19 am

India and Nepal must build on the socio-cultural foundations of their relationship to meet the economic and ecological challenges of the 21st century (Subrata Dhar)

Nepal’s relative underdevelopment mimics the paradox of an “irresistible force meeting an immovable object” where the compelling potential of a uniquely attractive country sits under-utilised. The young republic has no choice but to ramp up its economic ambition if it is to match the tall political achievements of recent years. Nepal today is a progressive country, propelled by the democratic mass movements of 1950, 1990 and 2006, heading in earnest towards building a deeply inclusive state.

Despite modest economic growth, Nepal halved absolute poverty in the past two decades. It dramatically reduced rates of child and maternal mortality. Primary school enrolment, with gender parity, exceeds 97 per cent, and average life expectancy has crossed 70. Nepal also stands out on several measures of civic engagement, from well-managed community forests to community radio. After years of policy paralysis, there is broad realisation now that the country needs to project a clear roadmap to prosperity. We envision Nepal as an enterprise-friendly middle-income country by 2030, peopled by a vibrant middle-class. To get there we need to mobilise an unprecedented volume of public revenue and private investment, domestic and foreign, by signalling credible economic reforms, relaxing binding infrastructural constraints, and designing inclusive institutions.

Nepal and India are among the closest of neighbours in the world. In the 21st century, the challenge is to build on our socio-cultural foundations to leapfrog economically. We now need to mould our thinking to the possibilities and challenges of the 21st century. How do we groom young people for jobs with technology-aided skills? How do we cooperate on mutually beneficial terms on water and clean energy, and help mitigate climate change? How do we accelerate the reduction of poverty, inequality and vulnerability? How do we build sustainable cities and livable habitats? How do we adopt new paradigms of production and exchange? Over the next decade, a sincere pursuit of the following clusters of development issues could lift us all.

One, wider connectivity. When Prime Minister Narendra Modi addressed Nepal’s Parliament three years ago, he spoke of the importance of highways, infoways and transways (HIT). To reduce trade and business costs, to deepen people-to-people ties and to open up new economic opportunities, Nepal needs to connect with growth poles in the region through 21st century electric railways, expressways and expanded air routes directly connecting more cities in Nepal to more cities in its neighbouring countries. Furthermore, the building of synchronised transmission grids to trade hydropower generated electricity will help boost green growth.

Two, augmenting productivity. Nepal’s formidable topography makes material access to world markets costly. However, the availability of clean energy, an affordable workforce and the unexploited bounties in niche sectors with high value-to-weight ratios make Nepal uniquely tempting to investors. Tourism and landscape marketing can be an anchor of prosperity. The fertile Tarai lands and agro-climates in the hills could support a much more productive agriculture than they do today. The rise of the large Indian middle class, and investors, present opportunities on both sides, with Nepal’s hills being potential locations for world-class tourism, as well as education and health institutions.

Three, tapping new economic possibilities. Nepal today faces an enormous trade deficit with India, as production competencies shrink and large inflows of remittances fuel growth in imports. The share of Nepal’s manufacturing sector has plunged from a peak of 10 per cent of GDP in 1996 to around 5 per cent today. However, patterns of trade and industrialisation are evolving. The new emphasis, for example, is on fragmented tasks rather than complete industries. “Make in India” and related campaigns to turn the country into the next global hub for manufacturing presents a great opportunity for Nepal to latch on to fragments of the regional value chain. Sectors like textiles, auto parts, electronics, food-processing and pharmaceuticals embed low-hanging fruits. Nepal’s hydropower can also spur high-energy high-tech sectors such as server farms.

Four, applying mass social innovation. Nepal is an early champion of welfare schemes even at a low stage of development, spending about 4 per cent of national income on social transfers. However, India’s ambitious embrace of modern information and communication technologies, affordable insurance and pension schemes and guaranteed employment are breakthroughs in social innovation that could be emulated in the region. We must adopt and further viable social protection measures to stem the challenges posed by inequality and vulnerability.

Five, protecting the regional commons. The Himalayas are one of Nepal’s — and the world’s — greatest natural assets. South Asia will face a major shortfall in the supply of fresh water over the next decade. This crisis will directly hit subsistence, morbidity and the survival of tens of millions of people. Globally, we are all bound to help limit temperature increase to within 2-degrees above pre-industrial levels. Nepal’s big rivers can be a source of clean energy that can displace dirty sources of power in the Subcontinent.

The relative advantages of South Asian countries can be pooled to match each of our needs through common power grids. Just as upstream water pollution from cities and industries in Nepal could harm agriculture and drinking water in India in the future, air pollution transported to Nepal from much larger sources in India has already been documented to be adversely affecting Nepal’s environment, including at the Buddha’s birthplace, Lumbini. The emission of short-lived climate pollutants, such as black carbon, warms the atmosphere, changes monsoon precipitation patterns and melts Himalayan glaciers. Cooperation on governing our regional commons is vital for our shared quests of good health and progress.

Both India and Nepal are dominated by a youthful population with demographic dividends yet to be reaped. By 2020, the median age will still just be 29 in India and 25 in Nepal. During the visit to India this week by the Prime Minister of Nepal, Sher Bahadur Deuba, it will be a mark of departure to look to the future, not just the past, and to pledge a pursuit of a forward-looking development agenda where each country helps the other on initiatives that are transformative in nature.

The article is well written by Dr. Wagle it has a positive tone. Would like to congratulate him. Indeed following the restoration of democracy in Nepal in 1990 the pace of reduction of IMR and life expectancy was faster compared to the Panchayat regime (refer to my article in the Himalayan Times of 18th Aug 2016). Similarity, remarkable progress has been made on the education front helping to reduce inequalities. Dr. Wagle has also pointed out the new opportunities emerging such as demographic dividend in Nepal which if well addressed can change the fate of the masses for the better. Despite high potential for fast economic growth and very good will of donor community, Nepal's bureaucracy is sluggish. There is a need to revamp this if inclusive and fast growth is to be achieved. The NPC has always been providing good advice and implementation is not the responsibility of the NPC. Alternatively, empowered monitoring body can go a long way to contribute to fast growth.

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DineshBThapa

Aug 25, 2017 at 5:34 am

It doesn't matter what is the tone of the article, but where does the country stand on a geo-political issue. Tell me how many 5yr plans issued by NPC and compare with today's development. Most of the Asean nations were below Nepal satadard before 3decades. Compare today what in a shameful situation Nepal is. Donors-these are the people who destroyed the country. Nepal with immense natural resources, unfortunately ruled and governed by corrupt and incapable people that is the root cause.

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Amitesh Sahay

Aug 24, 2017 at 8:17 pm

With the rrecent change in the Nepal's a tude, the relationship between Indian and Nepal lies in the hand to Nepal. Ball is in Nepal's court. They need to understand the importance of it, India has already given lots of support at every level to prove that she wants to have a strongest of bond with Nepal.
If Nepal wants to go toward China, its their choice, no one is going to stop them, as every country has the right to take their decision. But only thing that should keep in mind that, if they go along with China, their condition will be similar to Srilanka. Before they would understand, whats happening, Chine will have control over Nepal, and Nepal may loose its sovereign tag forever

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manoj

Aug 24, 2017 at 9:08 pm

Majority of Nepalese are with India, it is natural and traditional. China is still alien for common people. Majority of people want the status of Hindu nation again, which they lost to communist-vatican nexus. Atheist Communists will never give chance to vote on these issues.

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Samrat Joshi

Aug 24, 2017 at 6:48 pm

Writers description on economic potentiality of Nepal is fine. No doubt. But is there conducive political environment, is the big question. Country is under communists now, prin lly they are loyal to China. Current young republic is a like sick and handicapped baby with dark future, because the radical agenda of secularism, federalism, republicanism are imposed by so called success of Guerilla war of Maoist. That war was against multiparty democracy, parliamentary system and a only Hindu kingdom. Supported were EU-US and India with different vested interests. Although it was Italian Sonia establishment in India at that time. China never intervene for radical regime change. So point is when the foundation is weak, blame game and double standard doesn't work in today's open world.

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Bihari Krishna

Aug 24, 2017 at 3:34 pm

All the leaders of Nepal's six-decade old planning commission had bragged about the country's diverse development potentialities but had left with little to show for their incumbency. Dr. Wagle should take note of the fact that none of Nepal's three success stories-- poverty reduction, forest restoration and reductions in IMR and MMR--were "plan" achievements. While poverty reduction has been the result of the massive exodus of unemployed labour force and resulting remittance--a resounding failure of development planning--the other two have been idiosyncratic success of the king's regime in 1988 and remained irreversible because the users themselves were empowered to manage and own them. The post-1990 roundly corrupt politicians have simply failed the nation by not replicating them more widely. So, Dr. Wagle would probably do better if he focused on empowering the beneficiaries themselves across all sectors during his tenure which, given bhagbanda politics, is bound to be limited.

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CClements

Aug 24, 2017 at 3:24 pm

What do these half-Chinese know about common culture? They are in an enviable position to blackmail India now that they are betrothed to China.

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GPrasad Sharma

Aug 24, 2017 at 8:27 pm

Cc>It is true that Nepals inclination towards China is a matter of headache to India, but ask yourself who manufactured this situation, it is India itself. What happened when shortsighted Indira-Rajiv regime manufactured LTTE and Khalistan. Likewise ask Sonia, Yechuri. Shyamsharan, SD Muni, Karansingh how they played foul game by manufacturing "maoist" against a peaceful neighbour. Communists ultimate goal in Nepal is NKorea style communism. Unfortunately after second half game of regime change went into hands of China and America.

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Ramesh Shrestha

Aug 24, 2017 at 10:23 pm

You hit the bull's eye! Any criticism in Nepal on India's big brotherly at ude towards Nepal is seen as anti-Indian without realizing the abrasive behaviour of India, which include periodic blockades that started back in 1959 and trade agreements that always puts Nepal at a disadvantaged position. Of course Nepal's politicians are partly to blame too. For example how can a country agree for a 199 year agreement (kochi dam)? Anyway I am very happy to see this positive article on Nepal in an Indian newspaper.